Agenda item

Report of the External Auditor, Deloitte.

Deputy Chief Finance Officer, Ola Owolabi, presented his report regarding Deloitte’s draft Plan for the External Audit of 2020/21. He noted that, in line with best practice, the Plan included: the assessment of key risks, the approach that would be taken by the external auditors, and the process for determining and ensuring economy and efficiency and effectiveness.

The DCFO welcomed the commitment of resources from Deloitte and the consequent opportunity it presented to deliver all three external audits this year.  He reminded the Committee that Central Government was considering implementing some of Sir Redmond’s Report’s recommendations this year, which would change the deadline for publishing audited local authority accounts from 31 July to 30 September.

Ben Sherrif, Deloitte, then presented his draft Plan for the External Audit 2020/21. He summarised the main areas of risk and focus for the audit, and noted that these would be monitored and revisited if matters arose.

The Chair thanked Mr Sheriff and the Committee considered the report.

Mr Sheriff confirmed that the three main risk areas of property valuation, credit, and management control, were all typical for a local authority. Focus areas would include pensions, ICE accounting and Covid-19-related matters.

He noted that ‘value for money’ reporting would be different for this audit, to reflect new regulations for more detailed commentary on this issue.

Mr Sheriff clarified the context for property valuations and the noted the potential for uncertainty around valuations as a result of Covid-19 impacts. 

During discussion of the issue of property valuation: 

·       The DCFO confirmed that a list of Council property valuations could be made available to the committee, if requested. Issues of commercial sensitivity around information from the Council’s investment portfolio would have to be considered first

·       The CFO clarified that there was a rolling programme of evaluation monitoring and such a list would be from a given point of time.

·       The CFO clarified that when the Council had a specific interest, either for making an investment or disposing of an asset, then far more detailed work would be undertaken to determine both fair market value and the best ‘value for money’ outcome for the Council.

·       Mr Sheriff confirmed that the external audit work would include a detailed review of the property valuations and use of outside specialists to ensure a comprehensive ‘check and challenge’ approach.

The Committee expressed a preference for having the external audits presented to them individually across the coming months, rather than all in one meeting.

An ideal schedule for presenting the external audits was agreed as:

2018/19 Accounts – April/May time

2019/20 Accounts – July

2020/21 Accounts – September/November

The Chair thanked Ben Sheriff and Paul Thomas for attending the meeting, and went on to thank both the team at Deloitte and the Finance Team within the Council for the progress on resolving the issue of the delayed external audits.

Resolved:

1. To note the draft External Audit Plan for 2020/21.

2.     The Deputy Chief Finance Officer to liaise with Democratic Services to schedule Committee meetings to fit with expected report delivery from Deloitte.  Nominally, for May, July and end of September.